LMC Report: Third Country Market Potential- China
NORTHERN IRELAND, UK - Anyone attending the Anuga food fair is reminded in no uncertain terms that in the context of global red meat production / consumption, the UK and Irish markets are small fish in a big pond.Anuga is a huge event and is
almost like a microcosm of the entire global
market for food, which demonstrates the sheer
scale and complexity of the international market.
Among the issues explored by LMC
representatives at Anuga was the importance of
achieving export certificates to lucrative third
country markets such as China and Russia where
there are reportedly significant opportunities for
fifth quarter sales.
LMC currently supports the
work of the UK Export Certification Partnership in
gaining access to new markets and market
analysis shows that this work is very worthwhile.
The UK market may remain the bread and butter
of the NI beef sector, but recent analysis shows
that there are significant opportunities to be
explored elsewhere, such as in the Middle East,
Asia and Russia. At the very least, the strong
performance of these markets has the potential
to take more beef off the global market and put
upward pressure on local price regardless of
access.
However, access to these markets would
also provide a ready outlet for fifth quarter cuts
which are more difficult (or downright impossible)
to shift in some markets open to the NI beef
sector. The growth of the middle classes and
foodservice sectors in these regions also gives
rise to greater potential demand for prime cuts.
China is perhaps the best example of a
developing economy where strong beef demand
growth may provide significant opportunities for
exporters. Traditionally beef offal (typically
stomach, liver and kidney) was the important
market in China. Although the market is expected
to remain strong there for at least the next five
years, it is possible that in the longer run beef may
become more prevalent with growing demand
from younger more affluent consumers with a
more westernised outlook.
In recent years, the Chinese beef trade has been
characterised by growth in demand for niche /
luxury meats and upgrade in meat retailing. The
growth of foodservice in China has been
phenomenal and in 2010 the sector was expected
to grow by 15-20 per cent. Beef has traditionally
been eaten outside the home in China so this
foodservice growth is particularly pertinent.
Western fast food chains have fostered beef
demand by introducing consumers to beef
burgers and their continued expansion ought to
have a positive impact on overall beef
consumption. Restaurant chains are expanding
rapidly and are chasing beef supplies.
Yum! is the
market leader in fast food and in January it was
reported that they were opening a new restaurant
in China every 18 hours. McDonalds are
reportedly aiming to open a new restaurant every
day in the next three to four years.
Meanwhile,
the US Department of Agriculture estimate that
beef output in China is in contraction with beef
prices at record levels. There is a growing list of
eligible meat suppliers to China and the local
industry will be keen to see the UK beef added to
that list.
With incomes rising generally and
urbanisation an ongoing theme in China, it is likely
that beef consumption will continue to rise and
the likelihood is that Chinese beef supplies will be
increasingly serviced by imports.
These developments provide an excellent reason
for strive for market access in these third
countries and further diversification of markets
can certainly work in the favour of the NI industry.
Further Reading
- | You can view the full report by clicking here. |
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